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Statement by Dr Tan Seng Giaw, DAP National Vice-Chairman and MP for Kepong on the Malaysian Budget to bring on smiles as pronounced by the Prime Minister Dato' Seri Dr Mahathir Mohamad. 17.10.2000

This is the budget session of Malaysian Parliament. The budget will be presented on 27 October 2000. As expected, the Prime Minister Dato' Seri Dr Mahathir Mohamad says that despite the fuel hike, it will be a good one for the people.

'I am happy that the economic recovery has enabled the Government to table a people's budget," he added.

No doubt, some people will laud the budget before and after it is presented. Even if things have gone wrong, there are still compliments. For example, things went awry in 1997 with the unfolding of the economic crisis, there were still endless justifications for the 1998 budget. At that time palm oil price was good, cushioning some people from the effects of the crisis.

Now, the manufacturing sector such as electronics for export and the crude oil price make the Government smile. The Prime Minister is grinning from this bonanza. But, he has yet to look at all the frowns such as the low price of palm oil and rubber, the lingering effects of the economic crisis in certain sectors such as the distributive trade and the widening poverty gap. Information technology has made the gap worse - the digital divide.

The high crude oil price increases Malaysia's revenues. But, it also makes the Government approve the increase in petrol price by 10%. Granted, there is substantial subsidy. Nevertheless, this increase gives rise to the hike in prices of other goods - inflation. Transport cost goes up. Privatized companies such as Tenaga Nasional Berhad (electricity) are thinking of raising their tariffs. The Government should not entertain such requests.

Besides inflation, the mergers of banks, insurance companies and security firms cause anxiety. For one thing, is the Government really serious in effective reforms of the banking, insurance and security sectors? We hope that Dr Mahathir and his Finance Minister Tun Daim give us the details of these mergers and the management of the non-performing loans.

Th ringgit is under-valued. The Prime Minister says this is good for our exporters. The capital control remains. On the other hand, the weaknesses of the international financial architecture persist. What strategy has the Government for the continued capital control? While it did shore up the economy during the height of the economic crisis, what shall we do now?

The coming budget may bring smiles to some. What will the Government do for the frowns?

Dr Tan Seng Giaw